PEFINDO: PT Wijaya Karya (Persero) Tbk’s new bonds issuance rated “idA”
Tuesday, September 14 2021 - 05:04 AM WIB
(13 September 2021)--PEFINDO has assigned its “idA” ratings for PT Wijaya Karya (Persero) Tbk (WIKA) and its proposed shelf registered bond II Year 2021 with a maximum amount of IDR3.5 trillion which will be used for refinancing purpose, as well as its “idA(sy)” rating for WIKA’s proposed sukuk mudharabah II Year 2021 with a maximum amount of IDR1.5 trillion for working capital purpose. The outlook for the corporate rating is “stable”.
An obligor rated idA has a strong capacity to meet its long-term financial commitments relative to those of other Indonesian obligors.
However, the obligor is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated obligors.
Suffix (sy) indicates the rating mandates Islamic principles compliant.
The corporate rating reflects WIKA’s strong market position in the national construction industry, diversified revenue sources, and strong financial flexibility. The rating is constrained by the Company’s high financial leverage in the near to medium term, risks from expansion into new businesses, and the inherently volatile business environment.
The rating may be raised if WIKA significantly improves its financial leverage and debt service coverage indicators on a sustained basis while demonstrating more steady cash flow generation supported by a more diversified business. However, the rating may be lowered if it incurs significantly higher debt than projected without a corresponding improvement in EBITDA on a sustained basis.
Established in 1961, WIKA is one of the state-owned enterprises (SOE) in the construction sector. It is expanding its business into infrastructure, building, property, realty, investment, energy, precast and construction engineering. As of June 30, 2021, its shareholders were the Indonesian government (65.05%) and the public (34.95%). (ends)